Print Email Facebook Twitter Service innovation for small fashion retail; analysis and design of an innovative service focused on retailers, provided by Philips Lighting Title Service innovation for small fashion retail; analysis and design of an innovative service focused on retailers, provided by Philips Lighting Author Kikkert, R.S. Contributor Schoormans, J.P.L. (mentor) Calabretta, G. (mentor) Faculty Industrial Design Engineering Department Product Innovation Management Programme Strategic Product Design Date 2012-08-30 Abstract The goal of this report is to present the process and concept design for an innovative service, which will be provided by Philips Lighting and is focused on the retail industry. For this purpose, a high potential target segment has been identified within the retail industry; the small fashion retailers. The service concept design creates easier accessibility to the products of Philips Lighting, provides insight in the effects of the products, product combinations and product solutions and finally it uses the retailer’s preferred channels to do so. In contrast with products, services make use of intangible elements to fulfil the need a consumer has. Using intangible elements brings various challenges, since they are only consumable at one time and often experienced differently per customer. A service always has at least one tangible element, which is the touchpoint. For the customer, the touchpoint are the evidence that the service exists, which makes these tangible elements very important in the design of any service. In reality the border between services and products is not a hard one. Products are often supported by several services, and services may use products. Philips Lighting, one of the three main sectors of Philips, is the provider of the service that is presented. With a turnover of over 7,5 billion euro’s, Philips Lighting is leading in the Lighting industry. The retail department creates a turnover of almost 800 million. Even though slowly more and more products are involving supported services and several services are arising, Philips Lighting is currently strongly product focused. A wide variety of services are already focusing on the retail industry. These services range from simple cleaning services, to total redesigns of the interior. All the services relate to a key activity of the retailer. To figure out the position of the retail in the future, a trend analysis has been executed. It has been identified that many digital channels see a quick rise. As a side effect, the connectivity between these various (digital) channels needs to be agile to be perceived positively by its user. Currently Philips Lighting focuses its sales on large chain retailers and consumers. The small retailers in between are not targeted, while this segment accounts for more than 50% of the retail market. Since the fashion segments is identified as most open to innovative services, it is the largest segment within the retail industry and it has a stable market size, this segment is chosen as a scope for the project. The scope focuses on the European market, based on the corresponding attitude and culture towards technology and services between the countries. The service design uses two process descriptions to ensure both the mental as the physical journey the retail goes through are covered. Initial attention is created by tradiational advertisment directed directly at the retailers or placed in retail related printings like the magazine of a branche association. Further attention and inspiration is created by displaying Philips Lighting products in action at locations that are frequently visited by the retailer. With the use of the internet, retailers can immediately get further informed about the products that are being displayed. An online tool automatically creates a range of light plans for the retailer, based on various effects that can be achieved with the lighting. The retailer only has to choose one, and optionally make the adjustments he wants. Subsequently the retailer can find other retailers in his surrounding that already have the specific or similar lighting products installed. It allows the retailer to not only see the product in real life, but also in environment similar to their own store. It is very likely that the retailer trusts and follows the advices that are given by his colleague. An online tool allows the retailer to further create his personal light plan. The products he has seen in real life are seamlessly added to his profile and easily added to his light plan. In a personal phone call or chat the details of the purchase are discussed and the retailer will be informed about the various supporting services like video workshops about the installment of the products, sharing his light plan online and optionally contact an installer if the retailer does not want to do it himself. The products that are purchased are prepared as if they were meant for consumers. This means they have simple manuals and are as close to plug and play as possible. The online tool allows him to comment on the products he has purchased and to re-order any products in a simple way. Finally the retailer can expect other retailers to visit his store to have a look at his lighting. This creates reassurance, since colleagues are interested in the lighting products the retailer has purchased. An estimated costs analysis shows that it is likely that the service will be profitable. In the expected scenario, the cumulative cash flow will turn positive in the fifth year, even though the analysis is based on the assumption that the first year will not generate a single sale. Both the best as worse case scenario show an IRR of above 10%. The service fits the target group perfectly, since it connects the retailers with its colleagues, the persons they trust the most. For Philips this connection also fits very good, since it dramatically decreases the effort needed from philips to keep the service running. As can be seen in the costs estimation and the blueprint, most elements of the service are preparation activities. Above all, the service provides a seamless journey through the various mental en physical stages of the purchasing process. Subject service designretailPhilips Research To reference this document use: http://resolver.tudelft.nl/uuid:cf603e28-bd4f-42f6-b72b-32c603fe57b9 Embargo date 2013-08-30 Access restriction Campus only Part of collection Student theses Document type master thesis Rights (c) 2012 Kikkert, R.S.